That Dreaded Piece of Mail
September Tax Article

Well, it has finally happened. You are about to open an envelope which the return address indicates is from the Internal Revenue Service.

You can feel the knot in your stomach. Your heart rate increases and your palms are sweating.

Could it be a nice letter informing you that you have an unexpected refund coming? A tax bill for your 1998 return which they claim you never filed? A notice informing you of an impending audit?

It is anybody's guess, but how you address what you discover in that envelope can have a tremendous impact on your tax liability.

Although the IRS is trying to changes its image into that of a more customer friendly organization, the fact remains that what they claim can make or break a taxpayer. There are some general rules that all taxpayers should follow when working with the IRS.

#1 Be sure to put everything in writing and send it off by certified mail to the address listed in the IRS notice. If you need to include supporting documents, keep all originals and send them photocopies.

#2 If the IRS sends you a refund check which is more than you expected, do not deposit it until you are satisfied with the explanation they provide regarding the discrepancy. If the IRS made a mistake and sent you too much money, they can demand that you repay the funds with interest from the date you deposited the check. Amazing, huh?

#3 If the IRS says you owe them money for an overdue tax, it is wise to pay them. You can hold back on remitting interest and penalties if you feel you have a strong case, but be sure to write them a check for the tax due in order to avoid any additional penalties.

#4 The IRS has also established the Problem Resolution office to assist taxpayers. They can be reached at 800-829-1040. You can inform them of the notice you received, explain your interpretation of the matter, and ask for guidance. It is important that you write down the name of everyone you speak with along with their badge number.

If, in spite of your best efforts, you feel that the IRS is not responding appropriately to your concerns, it would be a good idea to hire a CPA to review you case. Their hourly fees can be expensive, but their experience in working with the IRS may end up saving you a lot of money and grief.

Brigitte A. Thompson, President (WAHM of Sarah 1/93 and Jacob 4/97) DATAMASTER, LLC~

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About the Author:
All articles ©Copyright 1999 Brigitte A. Thompson Brigitte is the President of DATAMASTER, LLC and has been providing accounting, bookkeeping, income tax and payroll services since 1992. She has also operated a home daycare for years and has written a book for providers :
The Home Daycare Complete Record-keeping System